Why Some Lawyers Won’t Work For Colorado Marijuana Businesses

The Denver City Council has created a special committee just for dealing with the nuts and bolts of implementing the new law allowing recreational marijuana use. And they run those meetings with a legal expert on hand. At a recent session, council members peppered a city attorney with questions about property rights and alcohol regulations and what is and isn’t legal, as they tried to make sound decisions about details like whether pot should be decriminalized for 18-year-olds. But marijuana businesses don’t necessarily have such easy access to counsel who can help them navigate these uncharted waters.

Lawyers are caught between the new state law that says marijuana is legal and federal law that still treats marijuana as an illegal drug. Earlier this year, the state bar association issued guidance saying lawyers who get deeply involved with ganga-preneurs are violating state ethics rules. Groups of local lawyers are lobbying the Colorado Supreme Court to update the guidance so they have more protection, but for now they’re operating in limbo.

“All lawyers have been aware or concerned about the ethical or legal implications of helping marijuana practitioners,” says University of Denver law professor Sam Kamin. Larger, more established firms have been wary to get involved with marijuana businesses at all, he says, “and all lawyers who do are aware of the potential pitfalls.”

Lawyers aren’t just bound to advise clients on following state law, Kamin says, but also laws in other jurisdictions; breaches of those statutes or ethical rules can lead to disbarment. The U.S. Department of Justice has said that, for now, it won’t come after businesses in Colorado and Washington that are abiding by new marijuana-friendly state statutes. But lawyers who help those businesses could still technically be prosecuted for aiding a client in breaking federal law or conspiring to break federal law, Kamin says, even if the threat of actual prosecution is “remote.”

The state Supreme Court is currently reviewing a proposed rule change, which essentially states that lawyers aren’t violating ethical guidelines if they are operating in accordance with state law, even if “that same conduct, standing alone, may violate federal criminal law.” Some local lawyers want to go further, putting it in writing that they can partake of the drug or run their own pot shops.

Even if professional conduct rules are amended at the state level, which won’t happen at least for months, lawyers aren’t completely safe unless and until federal law is changed, and members of other professions — like doctors, bankers and accountants — may find themselves in similarly sticky spots. “I don’t think the federal government is going to be arresting anyone,” Kamin says, “but as long as the cultivation and sale of marijuana is a felony, everyone is at risk.”

While that has a chilling effect on some lawyers, certain firms are embracing the budding market and making a name for themselves in the process. Take Vicente Sederberg, a firm which helped craft the ballot referendum that legalized recreational pot and brands itself as “the marijuana law firm.” The firm’s homepage makes its position clear: “Our clients are trailblazers,” it reads, “building a new and vibrant industry from scratch. Each and every one of them has made a conscious decision to assume a certain level of risk in order to change the course of history.”